An informal term (U.S. usage) for any fraudulent practice aiming to improve the apparent cash position in the accounts of an entity by overstating, though temporarily, the overall cash position in such a way that funds are transferred by cheques/ checks, on the last day of an accounting period, between its current accounts. The recipient account will be credited with the transferred amount, while the account out of which the amount is transferred will not have been debited. Kiting is a manipulation whereby an entity attempts to utilize temporarily overstated bank balances to conceal a cash shortage or meet specific balance requirements, particularly on the turn of an accounting period.
Kiting may also refer to another sort of fraud where an entity issues a check for an amount higher than the balance of an account on which the check is drawn.
